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SAP A1S Morphs into Business ByDesign

Business ByDesign is the new on-demand application suite from SAP, geared towards mid-market companies.

NEW YORK—After perhaps the biggest build up in recent memory, at least in the business applications sector, SAP unveiled its on demand suite built for the mid-market Sept. 19 at an event here at the Nokia Theater.

SAPs long-standing code name for the product, A1S, is now officially buried. The new product name: SAP Business ByDesign.

SAP has billed the introduction of Business ByDesign as not only a new product but a new business model and market for the company. If the demonstrations of the product prove accurate, SAP may be on to something, according to analysts.

The Business ByDesign suite is an integrated suite of products that interact with each other as processes are kicked off by specific events.

The applications themselves are completely new, written from scratch, according to Peter Zenke, SAP executive board member and technical lead for Business ByDesign. "The [application] code is 95 percent fresh code." Underlying the applications is also a new Foundation Layer that is comprised of "all the key objects" a company would need to define highly personalized items like products, bill of materials or recipes, according to Zenke.

The user interface for Business ByDesign is also new, although it is roles based, similar to Microsofts UI approach. SAP has decoupled the UI from the business logic which lets users (through consultants) design their own interfaces. Within the applications themselves, users are able to connect to live user communities and to SAP to get help.

Zenke said that about four years ago Hasso Plattner, co-founder of SAP, came up with the concept of building a new suite of applications to address the mid-market, one that would enable customers to have a much lower total cost of ownership than SAPs traditional on premise ERP suite. In fact SAP—and its enterprise application developer brethren—has been saying for at least as long that it needs to tap into the huge mid-market to make up for the withering market for massive, multi-year, multi-million software implementations.

[SAP Business ByDesign] is not just a new product for us. Its much more. Its a new era of SAP. We enter now into a new volume business," said SAP CEO Henning Kagermann, during his keynote address at Wednesdays event. "[The new suite] is full of innovations. In my 25 years in this company, this is the most important announcement in my career to date."

SAP has put a huge stake in the ground with its on demand model. At the beginning of 2007—after a shaky fiscal 2006 with two poor quarters—Kagermann said the company would spend between $414 and $552 million (300 to 400 million euros) over eight quarters to build Business ByDesign.